US single-family rent increased in July as millennials renting low-end rental homes drove the gains.
CoreLogic’s Single-Family Rent Index was up 2.9% year-over-year, easing from the 3.1% gain in July 2018.
But the increase across the 20 metros analyzed is being fueled by the demand for low-end rentals relative to inventory with rents for this sector (defined as properties with rent prices less than 75% of the regional median) rising 3.5% year-over-year. Again, this slowed from July 2018 when the annual gain was 4.1%.
“Rent increases on entry-level properties continued to outpace the rest of the rental market,” said Molly Boesel, principal economist at CoreLogic. “This trend should continue in the near term with strong demand from younger millennials who indicate they prefer to rent rather than own a home.”
For high-end rentals (defined as properties with rent prices greater than 125% of a region’s median rent) the annual increase was 2.7% compared to 2.6% in July 2018.
Phoenix continued to lead the year-over-year rent growth in July 2019 with a 7.2% increase.
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